Age-related deficits in decision making are well documented and these decisions often have huge social implications for individuals and their family members, leading to significant pressure to make the best decisions. Much of the previous research on aging focused on history-independent decision-making tasks for which current rewards are independent of previous decisions. This research ignores situations where the current rewards available from each option are influenced by previous decisions. History-dependent decisions are ubiquitous and they are often accompanied by various forms of pressure. Recent work in our labs suggests that older adults perform better in history-dependent situations while younger adults perform better in history- independent situations. However, the precise neural and computational mechanisms associated with these age-based differences remain unclear. Additionally, virtually no research has examined how older adults respond to pressure despite its prevalence. Recent work suggests that normal aging is associated with declines in the neuromodulation of the frontostriatal limbic network associated with decision-making. Other work provides evidence for compensatory over- activation in brain regions, particularly lateral frontal brain regions, for older relative to younger adults in a variety of cognitive tasks. This over-activation is seen as compensatory for neural declines associated with aging and is known as the compensation-related utilization of neural circuits hypothesis (CRUNCH). We hypothesize that compensatory over-activation can account for the age-related advantage in history-dependent decision-making. In addition, compensation related frontal activity in older adults may follow an inverted U- shape as cognitive demand increases. With increased cognitive demand, under-activation in older adults, relative to younger adults might result when the crunch point is reached. Increased pressure in decision- making situations may force older adults to hit such a crunch point. The goal of this proposal is to examine the effects of aging on history-dependent and history-independent decision-making, and to systematically test predictions of the CRUNCH hypothesis as it applies to decision- making under pressure. Our research team is highly qualified to achieve these aims given our expertise in brain imaging, computational modeling, and behavioral studies of normal aging and pressure. We will apply models that assume qualitatively different strategies to the data and prediction errors from these models will be used as regressors with neural activity. We predict that older adults will show greater activation in DLPFC and LOFC, compared to younger adults under no pressure conditions but that older adults will show under- activation in these same regions under pressure conditions. Aims 1 and 2 examine the neurobiological underpinnings of age-related changes in history-dependent and history-independent decision-making. Aim 3 extends Aims 1 and 2 by examining decision-making under pressure.